David Einhorn's Greenlight Capital sues Apple over preferred stock

Bailey McCann, Opalesque New York: David Einhorn, hedge fund activist and Apple investor is not happy with the company. This morning in a press release, Einhorn called out the company on new proxy for its charter saying it should give shareholders a bigger cut of its growing cash pile. Greenlight is voting against a proposal that would eliminate preferred stock from Apple’s charter. The hedge fund is also asking all shareholders to vote against the change at Apple's annual shareholder meeting on February 27.

According to Reuters, Einhorn is long on Apple shares but has said the company has a cash problem that it needs to fix by giving away perpetual preferred stock with a 4% yield. Einhorn has been an Apple investor since 2010. "We believe Apple must examine all of its options to unlock the growing value of its balance sheet for all shareholders," Einhorn said in a statement. "Over the past several months, we have had an ongoing dialogue with Apple regarding one option to do so, namely the creation of a new security, a perpetual preferred stock that would be distributed at no cost to Apple’s existing shareholders, and would provide an attractive, sustainable dividend while preserving Apple’s financial resources to pursue its business strategy."

Greenlight first described the concept at a May 2012 investment conference, where Mr. Einhorn demonstrat......................